Detroit Bail-out

[fabsroman]

Yes, my father had insurance paid for by the government, but if you ever look closely at those policies, they aren't completely paid for. They are almost like the high deductible policies I mentioned.

Essentially, my dad at one point had an 80/20 policy with BCBS, but that 20% can be a hum dinger too when a major surgery is required. For instance, on a $100K heart surgery, the insured/employee could be on the hook for $20K. Luckily, there is usually a maximum out of pocket on those policies, and nowadays they are around $3,000 to $5,000. I know because I had to review one of these policies about 4 years ago when a client of mine had a 2 month premature baby and the hospital bill was in the 6 figures and then some.

I think a health policy that makes employees responsible for the first amount of outlays, is a very good idea. Then, it gives them a little more incentive to be healthy (e.g., smoking, drinking, and eating). It also makes them think twice about risky behavior. Yes, a lot of families could not afford to be hit with a $5,000 insurance deductible, but as I mentioned earlier the employer usually kicks in an amount every year. Say it is $1,000 every year. If them employee and the employee's family don't use it for 5 years, then they have it covered for one catastrophic incident. If they don't use it for 30 years, or the employee decides to contribute a little extra to it, then they will have even more money in it and be able to weather a couple of catastrophes. Remember, if they don't use the money by the time they qualify for Medicare, it becomes retirement money.